An aerial view of Battersea power station, London, which is to be redeveloped by Real Estate Opportunities.

The owners of Battersea power station, which has been derelict since its closure 27 years ago, have won planning approval from the local council for a £5.5bn revamp that will create 3,400 homes and 15,000 jobs.

The agreement has been hailed as a major step forward by the council and the Irish property company behind the scheme. The London landmark, which featured on Pink Floyd's Animals album, has stood empty since it was decommissioned in 1983 as a number of plans to redevelop the 40-acre site failed.

The former power station's four white chimneys will be demolished and rebuilt, as they are deemed to be "beyond repair". The station is the largest brick building in Europe and won a grade II listing three years before its closure, which means it cannot be demolished.

Irish millionaires Richard Barrett and John Ronan, whose Real Estate Opportunities (REO) bought the site for £400m four years ago, had to revise their original plans after a proposed 300m tower was rejected by the London mayor, Boris Johnson, who argued it would ruin the view from Waterloo bridge to the Palace of Westminster.

Wandsworth borough council approved the new masterplan last night. New York-based architect Rafael Viñoly's futuristic glass funnel, rising from an enormous dome, has been scrapped and the design is now capped at a height of 60m.

The planning consent is a big boost to REO, which is trying to raise money from investors to fund the project and refinance £230m of debts held by Lloyds Banking Group and Ireland's National Asset Management Agency. The property firm wants to transfer the site to a separate company and has sounded out potential investors including sovereign wealth funds, private equity firms, wealthy families and property groups from around the world. REO is looking for a partner, possibly a consortium, to take a 50% stake in the project.

Rob Tincknell, who runs REO's parent firm Treasury Holdings, said: "We're hopeful of having someone tied up by the early part of next year. We're really delighted by the amount of interest we've got. I don't think anyone turned us down. This is the last great site in central London."

The scheme will now be referred to the mayor of London and the secretary of state for communities and local government, and Tincknell hopes to get the final go-ahead in February.

The Battersea Power Station Community Group, which opposes REO's plans, pointed out that the planners did not consider whether the property firm had the money to revamp the site. "If it were ever built, the power station would be obscured by massive blocks of luxury flats and hotels," the group claims on its website.

But Tincknell said the project had the support of local residents, notably the 71-member Battersea Power Station Community Forum, whose chairman Harry Cowd hailed the planning permission as "a major step towards finally saving the power station for public use and providing substantial community benefits".

Some 3,400 homes will be built, including 500 affordable ones, as well as shops, restaurants, a hotel, cinema and offices – effectively a new town with the power station at the heart of it. It forms part of a wider regeneration plan for the Nine Elms area on the south bank of the Thames, with two new Northern Line stations set to improve transport links. REO has pledged to contribute £203m towards the extension of the Northern Line from Kennington.

While repair work on the power station is due to start in 2012 and expected to be finished by the end of 2016, the whole project is set to take until 2026 to complete. Two of the chimneys will be used to produce green energy from a biofuel centre, and the station's two turbine halls are to host public events such as conferences.

"This scheme would restore one of London's most iconic buildings and create thousands of new jobs and homes," said Nick Cuff, who chairs the Wandsworth planning application committee. "The two Northern Line stations will spur on the regeneration of Nine Elms and bring a huge economic windfall to this part of south London. There is still a great deal of work to be done but this is an important step forward and will give the area's other major investors the confidence to press ahead with their plans."

About this article

Battersea power station revamp gets go-ahead

This article was published on
the Guardian website
at 07.30 EST on Friday 12 November 2010.
It was last modified at 23.51 EDT on Monday 19 May 2014.
It was first published at 06.20 EST on Friday 12 November 2010.